Planning for the future involves making important decisions about how your assets will be handled. While many people are familiar with wills, an estate plan goes beyond a simple document and covers a broader range of considerations. Understanding the difference between a will and an estate plan is essential for protecting your loved ones and respecting your wishes.
What Is a Will?
Wills are legal documents that outline your final wishes. They tend to contain detailed instructions outlining how an individual wants their assets distributed after passing and to whom those assets should be distributed. A will can also establish your wishes regarding who you want to care for your minor children and assign guardianship over your family members. A well-composed will should also name an executor or the person in charge of carrying out your wishes and the actions in the document.
Some of the critical issues that a will must address include:
- Personal identifying information
- Appointment of the executor
- Named beneficiaries entitled to the assets in your estate
- Appointment of a guardian for minor children
- Funeral and burial preferences
A will is a crucial piece of an estate plan. Still, an effective estate plan that will best protect your assets and your loved ones will often include additional documents and tools.
Estate Plan vs. Will
While a will is a legal document, an estate plan is a concept. Estate plans are an encompassing set of documents that can include a will but often include multiple tools to cover a variety of situations and circumstances.
A will can outline your final wishes and distribution of assets, but what happens if you are significantly injured or incapacitated? Who will make medical decisions for you? What if you want to retain control over some of your assets but are looking for ways to ease the tax burden on family members after you pass? Are there ways to help beneficiaries avoid the lengthy process of probate? Other tools can be valuable when creating an overall estate plan, which may include:
- Will
- Power of attorney
- Revocable trusts
- Irrevocable trusts
- Charitable trusts
- Advance healthcare directives
- Beneficiary designations
Again, the terminology can be confusing. Many people incorrectly assume that estate plans are only for the wealthy or those with highly valuable assets. Nothing could be further from the truth. Estate plans are for everyone. They protect everything valuable to you, not just your assets but your health and the well-being of your children. Contrary to popular belief, drafting a will or comprehensive estate plan doesn’t have to be cost-prohibitive either. An experienced Chicago estate planning attorney can review your needs, assess your goals, and strategize how to create an estate plan that protects your assets and loved ones.
Why Do You Need a Comprehensive Estate Plan vs. Will?
A will is a valuable document, but it’s only one piece of the comprehensive estate planning puzzle. Regardless of a person’s wealth, family situation, or financial situation, there are several reasons why it is vital to consider creating an overarching estate plan. First and most importantly, having an estate plan in place means you retain control over how your assets get distributed after your passing. If you die without a will or estate plan, the state of Illinois determines what happens to your assets and property via Illinois intestate succession rules.
Creating an estate plan, which includes a will, gives you the power to plan for your and your family’s best interests. It can also help:
- Outline a plan for asset distribution
- Allow you to name the beneficiaries or charities you want to inherit your assets
- Help family members avoid probate
- Provide potential tax benefits
- Ensure loved ones and minor children are financially secure
- Ensure loved ones are cared for by named guardians of your choosing
- Outline directives for medical care preferences
- Provide continuity and stability for business owners after the death or incapacitation of another owner
- Give you and your family peace of mind
Who do you want to call the shots: your estate plan and the executor of your will, or the state of Illinois?
Contact a Chicago, Illinois, Estate Planning Attorney Today
Estate planning is a strategic process. It may include numerous legal documents and decisions that ensure your financial, legal, and personal wishes are respected and executed. At Peck Ritchey, LLC, we take the time to work with you to create an estate plan that meets your and your family’s needs. Contact our office today at (855) 328-5787 to arrange a legal consultation.